United States v. Kenneth D. Hacker ( 2006 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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Nos. 05-2709/3450
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United States of America, *
*
Appellee, *
* Appeals from the United States
v. * District Court for the
* District of South Dakota.
Kenneth Hacker, *
*
Appellant. *
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Submitted: March 14, 2006
Filed: June 16, 2006
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Before WOLLMAN, FAGG, and RILEY, Circuit Judges.
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RILEY, Circuit Judge.
Kenneth Hacker (Hacker) brings this appeal following his guilty plea to bank
fraud under 18 U.S.C. § 1344. Hacker committed bank fraud in South Dakota while
on supervised release for several Massachusetts federal convictions. Following
Hacker’s guilty plea to bank fraud, the district court1 sentenced Hacker to 180
months’ imprisonment after departing upward under the Sentencing Guidelines
(Guidelines). In a separate proceeding regarding Hacker’s supervised release
violation, the district court revoked Hacker’s supervised release, sentenced Hacker
1
The Honorable Charles B. Kornmann, United States District Judge for the
District of South Dakota.
to 24 months’ imprisonment, and ordered the sentence be served concurrently with
the 180-month sentence if the bank fraud sentence is affirmed on appeal.
Hacker appeals, arguing the district court (1) erred by departing upward under
the Guidelines, (2) imposed an unreasonable sentence on Hacker’s bank fraud
conviction, (3) lacked jurisdiction to revoke Hacker’s supervised release, and
(4) imposed the revocation sentence for an improper purpose. Following our
thorough review of the record, we affirm.
I. BACKGROUND
In June 2000, Hacker was indicted in the United States District Court for the
District of Massachusetts for multiple counts of mail fraud, wire fraud, and uttering
and possessing counterfeit securities. Hacker pled guilty to the federal charges and
was sentenced to 18 months’ imprisonment and 3 years’ supervised release. On
September 25, 2001, Hacker was released from prison and began serving his
supervised release term, which would expire on September 24, 2004. In June 2003,
Hacker visited South Dakota to attend his brother’s funeral. Because Hacker had
been living in various Massachusetts homeless shelters, authorities allowed Hacker
to relocate to South Dakota and reside with his mother, Marlene M. Iron Shell (Iron
Shell), while under the supervision of South Dakota probation authorities.
In July 2003, Iron Shell received $125,264.59 from her deceased son’s life
insurance policy. She deposited the money in her Bank One account. On October 6,
2003, following Hacker’s urging, Iron Shell added Hacker’s name to all of her bank
accounts, giving Hacker authority to withdraw funds from the joint accounts. Over
the next few months, Hacker transferred approximately $90,000 to his mother’s Wells
Fargo Bank account without her knowledge. Hacker also withdrew money from the
Bank One account using online cash services. The Bank One account eventually was
closed with a zero balance on January 23, 2004.
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In February 2004, Hacker opened savings and checking accounts with
BankWest, Inc. (BankWest). During the next month, Hacker used Iron Shell’s
personal checks and forged her signature, writing eight checks totaling $204,486.78
to himself on the closed Bank One account and depositing the checks into his own
BankWest accounts. Using several methods, including cash withdrawals, wire
transfers, cashiers’ checks, automatic clearinghouses, and electronic transfers over the
Internet, Hacker withdrew funds from his BankWest account before the checks were
returned for nonsufficient funds. BankWest froze Hacker’s accounts before posting
some of the deposited checks, yet the bank still incurred an actual loss of $87,228.79.
Even after BankWest closed Hacker’s account on March 29, 2004, Hacker attempted
to withdraw funds from the account, including a failed $29,999.99 electronic transfer
to an Ameritrade brokerage account as well as nonsufficient funds to NetBank and
TD Waterhouse totaling over $15,000.
On July 21, 2004, a grand jury indicted Hacker for bank fraud, in violation of
18 U.S.C. § 1344,2 and for embezzlement and theft from an Indian tribal organization,
in violation of 18 U.S.C. § 1163. Hacker pled guilty to bank fraud, which carries a
maximum statutory penalty of 30 years’ imprisonment and a fine of one million
dollars. See 18 U.S.C. § 1344. At sentencing, the district court assigned Hacker a
base offense level of 7, see U.S.S.G. § 2B1.1(a)(1), and increased it by 12 levels
because the intended loss exceeded more than $200,000, see U.S.S.G.
§ 2B1.1(b)(1)(G). Two levels were added for the use of sophisticated means to
commit the offense, with no objection from Hacker. See U.S.S.G. § 2B1.1(b)(9)(C).
The district court also imposed a 2-level enhancement for obstruction of justice based
on Hacker’s failure to disclose a felony conviction in Oklahoma for obtaining money
and merchandise by means of a false and bogus check. Hacker’s adjusted offense
level of 23, together with his criminal history category of VI, resulted in a Guideline
sentencing range of 92 to 115 months. Finding Hacker failed to demonstrate he had
2
The grand jury also indicted Iron Shell for bank fraud, but the government
later dismissed her as a defendant.
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clearly accepted responsibility for his offense, the district court refused to reduce the
offense level from 23.
The district court then departed upward 6 levels on the grounds Hacker’s
criminal history category failed to encompass his past criminal conduct and did not
adequately represent the likelihood Hacker would commit further crimes. Noting
Hacker had been released from a 60-day jail sentence in Massachusetts to return to
South Dakota for his brother’s funeral, the district court also noted Hacker used this
opportunity to steal his deceased brother’s life insurance proceeds from his own
mother. The court concluded such conduct “was unusually heinous, cruel, and
degrading” to Hacker’s mother. The adjustment resulted in a total offense level of 29
and a Guideline range of 151 to 188 months. The district court sentenced Hacker to
180 months’ imprisonment and 5 years’ supervised release.
On July 12, 2005, the district court held Hacker’s revocation hearing, during
which Hacker admitted violating the conditions of his supervised release by
committing bank fraud. Although the recommended sentencing range was 12 to 18
months’ imprisonment, see U.S.S.G. § 7B1.4(a), the district court sentenced Hacker
to 24 months’ imprisonment, the statutory maximum under 18 U.S.C. § 3583(e)(3).
The district court further ordered the sentence to run concurrently with Hacker’s bank
fraud sentence if that 180-month sentence is upheld on appeal. If, however, the bank
fraud sentence is reduced on appeal, the revocation sentence should run consecutive
to the extent necessary to achieve a total sentence of 180 months. This appeal
followed.
II. DISCUSSION
A. Bank Fraud Conviction Sentence
Hacker first contends the district court erred when determining the appropriate
sentence for his bank fraud conviction by departing upward under U.S.S.G. § 4A1.3.
We review de novo whether the district court imposed Hacker’s sentence in violation
of law or as the result of an incorrect application of the Guidelines. See United States
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v. Fogg, 409 F.3d 1022, 1026 (8th Cir. 2005). We review for abuse of discretion the
district court’s decision to depart upward from the Guidelines, and we review the
extent of the departure and final sentence for reasonableness. Id. (citations omitted).
1. Upward Departure
Section 4A1.3 of the Guidelines suggests an upward departure may be
warranted when “reliable information indicates that the defendant’s criminal history
category substantially under-represents the seriousness of the defendant’s criminal
history or the likelihood that the defendant will commit other crimes.” U.S.S.G.
§ 4A1.3(a)(1). When contemplating and structuring such a departure, the district
court should consider both the nature and extent of a defendant’s criminal history.
United States v. Gonzales-Ortega, 346 F.3d 800, 802 (8th Cir. 2003). “In deciding
the likelihood that a defendant may commit other crimes, a court may take into
account any evidence of obvious incorrigibility and conclude that leniency has not
been effective.” United States v. Herr, 202 F.3d 1014, 1016 (8th Cir. 2000) (internal
quotations and alteration omitted). Although the sentencing court cannot consider a
defendant’s prior arrest record itself as the basis for an upward departure, it may
consider prior similar adult criminal conduct not resulting in conviction, prior similar
civilly-adjudicated misconduct, and prior sentences. U.S.S.G. § 4A1.3(a)(2), (3);
United States v. Hawk Wing, 433 F.3d 622, 628 (8th Cir. 2006).
Our review of the record convinces us the district court did not abuse its
discretion by departing upward under section 4A1.3. The district court documented
its basis for an upward departure, stating Hacker “was a career criminal, that his
occupation throughout his adult lifetime has been stealing money, that his criminal
history category (VI) was not adequate, [and] that his criminal history category does
not adequately represent the likelihood that he will commit further crimes or
encompass adequately his past criminal conduct.” In departing upward for
inadequacy of criminal history, the district court relied on Hacker’s Presentence
Investigation Report (PSR), and pointed to Hacker’s numerous convictions for which
he received no criminal history points, including convictions for petty theft, injury to
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property, larceny by check, larceny over $250, and larceny and embezzlement.
Furthermore, the district court considered several uncontested pending charges
against Hacker, including charges for grand larceny, passing a check against a
nonexistent account, and nonsufficient funds checks.
In addition, Hacker’s other misconduct, which he objected to as not relevant
conduct and as not admitted as a part of the guilty plea, included: causing Great
Western Bank to incur a loss of over $24,000 by writing nonsufficient funds checks
and writing checks on a closed Great Western Bank account; forging his own
“payroll” checks using another individual’s checking account number on the
counterfeit checks; theft from an Indian tribal organization for cashing seventeen of
the counterfeit “payroll” checks at a South Dakota casino, which checks were
returned to the casino for nonsufficient funds; cashing counterfeit checks totaling
$5,250 at another South Dakota casino; and storing computer images of his own
driver’s license (in stages of modification), U.S. currency, another individual’s
driver’s license and veteran’s identification card (also in stages of modification), a
letter indicating a transfer of ten million dollars to an account at Union Bank
Switzerland, and a copy of a “Jane Doe” social security card. In addition to Hacker’s
convictions, pending charges, and other misconduct, the district court also pointed to
Hacker’s repeated violations of probation and supervised release, as well as his
failure to pay any restitution in his federal fraud conviction from Massachusetts.
Hacker contends the district court erred in relying upon his prior arrest record
as a basis for departing upward, thus violating section 4A1.3(a)(3). During
sentencing, the district court briefly discussed twelve arrest warrants under Hacker’s
name. We agree with Hacker the record lacks sufficient information concerning the
factual nature underlying six of these arrest warrants, including four warrants issued
in 1996 for nonsufficient funds checks, one warrant issued in 1996 for obtaining
money or property by means of a false and bogus check, and one warrant issued in
2005 for fraud and nonsufficient funds. See Hawk Wing, 433 F.3d at 628 (noting
“the PSR must . . . provide specific facts underlying the arrests in order for the arrest
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record to justify an upward departure; otherwise the district court may not rely on a
mere record of arrest” (citation omitted)). However, the PSR provided sufficient
factual details underlying Hacker’s remaining arrest warrants to allow the district
court to consider them, and the district court did not rely solely on the warrants to
justify the upward departure.
Hacker’s consistent pattern of deceit and misconduct indicates both the
inadequacy of his criminal history category as well as a strong likelihood he will
commit future crimes. Hacker’s previous convictions, pending charges, and other
similar adult criminal conduct provided adequate grounds to warrant the district
court’s upward departure decision. See, e.g., id. at 628-29; United States v. Morse,
983 F.2d 851, 854 (8th Cir. 1993). Thus, notwithstanding the district court’s
erroneous consideration of six arrest warrants, we conclude the court had sufficient
evidence and did not abuse its discretion in departing upward.
2. Reasonableness of Hacker’s Sentence
Hacker next asserts the district court abused its discretion by imposing an
unreasonable sentence because the nature and circumstances of the offense as well
as his own history and characteristics do not justify the district court’s sentence of
180 months’ imprisonment. Hacker further argues disparity exists between his
sentence and sentences affirmed by this court in similar cases.
A sentence may be unreasonable if the district court “fails to consider a
relevant factor that should have received significant weight, gives significant weight
to an improper or irrelevant factor, or . . . commits a clear error of judgment.” United
States v. Haack, 403 F.3d 997, 1004 (8th Cir.), cert. denied, 126 S. Ct. 276 (2005).
Applying this standard to Hacker’s case, we conclude the extent of the district court’s
upward departure is reasonable. Contrary to Hacker’s calculations, it appears the
district court departed from a Guideline sentencing range of 92 to 115 months, not
from a range of 63 to 78 months as initially recommended in the PSR. Thus,
Hacker’s 180-month sentence was an increase of approximately 56% from the
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maximum Guideline range of 115 months. While a significant upward departure, the
district court’s thoroughly stated justification for Hacker’s sentence convinces us the
district court did not exceed the permissible bounds of its discretion, and thus
imposed a reasonable sentence.
The district court discussed its reasoning behind the upward departure and
sentence during the sentencing hearing, in its statement of reasons, and in its order
and opinion filed after the sentencing hearing, specifically noting its consideration
of the factors set forth in 18 U.S.C. § 3553(a). As the district court noted, Hacker’s
“behavior suggests an addiction to deceiving people.” Describing Hacker as a “one
man crime wave,”3 and pointing to Hacker’s “heinous” conduct of stealing his
deceased brother’s life insurance proceeds from his mother and bringing his mother
into legal jeopardy by forging Iron Shell’s name on checks and withdrawals, the
district court stated it had “not seen a more dedicated history of criminal activity” by
someone of Hacker’s age of 38 years. It further noted Hacker’s apparent failure to
learn anything from his previous experiences with the criminal justice system, finding
no reason why a person who, in effect, stole from his own mother and deceased
brother would not also steal from a stranger.
We agree with the district court that Hacker’s criminal history category did not
adequately reflect the likelihood Hacker will continue to commit serious crimes or
adequately encompass his past criminal conduct. “By taking account of the
seriousness of [Hacker’s] past criminal conduct and his potential for recidivism, the
district court advanced the statutory sentencing objectives of affording adequate
deterrence to criminal conduct, and protecting the public from further crimes of the
defendant.” United States v. Flores, 336 F.3d 760, 764 (8th Cir. 2003) (internal
quotations omitted) (citing 18 U.S.C. § 3553(a)(2)(B) and (C)).
3
By our count, Hacker has approximately ten prior adult convictions of record,
four of which were not included in his criminal history score.
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Furthermore, we consider the decisions cited by Hacker in support of his
sentencing disparity argument inapposite to the present case. For the reasons stated
previously, we find nothing unreasonable in the extent of the district court’s upward
departure to a sentence of 180 months’ imprisonment, which is still only 50% of the
statutory maximum of 30 years for the offense to which Hacker pled guilty. See 18
U.S.C. § 1344. We therefore affirm the sentence imposed by the district court.
B. Revocation of Supervised Release
1. Jurisdiction to Revoke Supervised Release
Hacker next contends the district court lacked jurisdiction to revoke his
supervised release from his Massachusetts conviction, arguing his supervised release
term expired before the district court’s revocation order and no valid warrant was
issued within the supervision period to extend the district court’s authority to revoke
Hacker’s supervised release under 18 U.S.C. § 3583.4 We review de novo the issue
of whether the district court had authority to revoke Hacker’s supervised release. See,
e.g., United States v. Barton, 26 F.3d 490, 491 (4th Cir. 1994) (“Jurisdiction is a
question of law subject to de novo review.” (citation omitted)).
Hacker’s Massachusetts supervised release term commenced on September 25,
2001, and ended on September 24, 2004, thus expiring before the district court’s final
revocation order on August 25, 2005. Therefore, the district court could revoke
Hacker’s supervised release only by satisfying the requirements of 18 U.S.C.
§ 3583(i), which provides:
The power of the court to revoke a term of supervised release for
violation of a condition of supervised release, and to order the defendant
to serve a term of imprisonment . . . extends beyond the expiration of the
term of supervised release for any period reasonably necessary for the
4
Although Hacker did not raise this issue before the district court, jurisdictional
questions such as this one may be raised at any time. See, e.g., United States v.
Davis, 103 F.3d 660, 675 (8th Cir. 1996) (quotation omitted).
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adjudication of matters arising before its expiration if, before its
expiration, a warrant or summons has been issued on the basis of an
allegation of such a violation.
The following facts guide our determination of whether the district court had
authority to revoke Hacker’s supervised release. On July 21, 2004, Hacker was
indicted in the District of South Dakota for bank fraud and for embezzlement and
theft from an Indian tribal organization. Following the issuance of an arrest warrant,
authorities placed Hacker in custody on July 29. On August 30, pursuant to 18
U.S.C. § 3605, the District of Massachusetts transferred jurisdiction over Hacker to
the District of South Dakota upon South Dakota’s order of acceptance of jurisdiction.
Approximately one week later on September 8, the District of South Dakota signed
the transfer order, accepting jurisdiction over Hacker “from and after the entry of
th[e] order.” The transfer order was electronically filed on September 23, and was
docketed and manually date-stamped by the district court clerk’s office the following
day.
Also on September 23, the United States Probation Office in the District of
South Dakota filed a petition to revoke Hacker’s supervised release (revocation
petition). The revocation petition alleged Hacker violated the conditions of his
supervised release by, among other things, committing bank fraud and embezzling
and stealing from an Indian tribal organization. The district court’s order, which was
located on the revocation petition’s final page and authorized the issuance of a
warrant, was signed, electronically filed, and manually date-stamped on September
23. The order was docketed the following day.
Relying on this chronology of events, Hacker contends: (1) his supervised
release term expired before Massachusetts transferred jurisdiction to South Dakota;
and (2) even if the transfer order was timely, the district court’s order for a warrant
for the supervised release violation was issued before South Dakota had jurisdiction
over Hacker. We disagree. The record indicates the transfer order was filed
electronically on September 23, 2004. The September 24, 2004, manual date-stamp
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on the face of the order, which muddies the waters on this issue, is secondary to the
electronic filing date and likely reflects the date of the order’s clerical entry on the
case docket report. Thus, the District of South Dakota timely assumed jurisdiction
over Hacker on September 23, 2004. Under the shelter of that jurisdictional umbrella,
South Dakota properly exercised its authority pursuant to 18 U.S.C. § 3606 to issue
a warrant that same day for Hacker’s supervised release violation.
Alternatively, Hacker challenges the warrant’s validity under the Fourth
Amendment, arguing the revocation petition was not supported by oath or
affirmation. Again, we disagree. Because an indictment had been returned against
Hacker for bank fraud and for embezzlement and theft from an Indian tribal
organization, and the revocation petition referenced both the indictment and the
allegations forming the basis of Hacker’s indictment as a basis for revoking Hacker’s
supervised release, “the warrant [could] issue on request without more, since the
indictment [was] a determination of probable cause by the grand jury, and the
indictment [was] made on the oath of the grand jury.” 1A Charles Alan Wright,
Federal Practice and Procedure § 151 (3d ed. 2005) (footnotes omitted); see also 18
U.S.C. § 3583(d); United States v. Hondras, 296 F.3d 601, 602 (7th Cir. 2002)
(holding under 18 U.S.C. § 3583(d) “committing any other federal, state, or local
crime is an explicit violation of the terms of [supervised] release”).
In support of his argument attacking the warrant’s validity, Hacker relies on
United States v. Vargas-Amaya, 389 F.3d 901, 906-07 (9th Cir. 2004), in which the
Ninth Circuit held a district court has jurisdiction to revoke supervised release under
18 U.S.C. § 3583(i) only if the warrant issued during the term of supervision is based
upon probable cause and supported by sworn allegations the person violated a
condition of supervised release. Unlike the case before us, however, Vargas-Amaya
does not indicate a grand jury indictment had been returned against the defendant on
the basis of factual allegations similarly referenced in the revocation petition. Id. at
903 n.1. Here, a grand jury indictment against Hacker–which by itself was a
determination of probable cause and was made on oath by the grand jury–provided
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the requisite probable cause and oath to support the later warrant. Thus, we find
Vargas-Amaya distinguishable from the present case and conclude the warrant issued
by the district court fully satisfied the requirements of the Fourth Amendment.
2. Reasonableness of Revocation Sentence
Finally, Hacker appeals the 24-month sentence imposed following Hacker’s
guilty plea for violating the conditions of supervised release by committing bank
fraud. During the revocation sentencing hearing, after considering Hacker’s
supervised release violations, his failure to make restitution or special assessment
payments, and his conduct forming the basis of the bank fraud conviction, the district
court opined Hacker should not serve any more or any less than the 180 months
already imposed for the bank fraud conviction. Accordingly, the district court
sentenced Hacker to 24 months’ imprisonment, to run concurrently with Hacker’s
bank fraud sentence if the 180-month sentence is upheld on appeal, and to run
consecutively if the bank fraud sentence is reduced on appeal to the extent necessary
to achieve a total sentence of 180 months. On appeal, Hacker argues the district
court’s revocation sentence is unreasonable because it was imposed improperly to
protect the length of the bank fraud sentence, and he requests this case be remanded
with instructions to make any revocation sentence concurrent with the bank fraud
sentence.
We need not address the propriety of the district court’s decision to hinge
Hacker’s revocation disposition to the outcome on appeal of Hacker’s bank fraud
sentence. Hacker’s requested relief on appeal is a remand with instructions “to make
any [revocation] sentence concurrent with the bank fraud sentence regardless of the
outcome” in the bank fraud appeal. Hacker does not challenge the reasonableness of
the 24-month sentence. Because we affirm Hacker’s 180-month bank fraud sentence,
under the terms of the district court’s order, Hacker’s 24-month revocation sentence
will run concurrently with the bank fraud sentence. Such a disposition ultimately
complies with Hacker’s requested relief for concurrent sentences. Thus, we affirm
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the sentence of 24 months’ imprisonment, to run concurrently with Hacker’s 180-
month bank fraud sentence.
III. CONCLUSION
We affirm Hacker’s sentence.
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